PPA 723: Managerial Economics Lecture 23: Benefit Cost Analysis 4, Examples The Maxwell School, Syracuse University Professor John Yinger
Managerial Economics, Lecture 23: B/C Examples Outline Early Childhood Education New Highway
Managerial Economics, Lecture 23: B/C Examples Early Childhood Education Programs ♦ Janet Currie ♦ The Journal of Economic Perspectives, Vol. 15, No. 2 (Spring, 2001),
Managerial Economics, Lecture 23: B/C Examples
Summary: Benefit/Cost Analysis of Head Start
Managerial Economics, Lecture 23: B/C Examples
New Highway Proposed Project New toll road Commuters will save time by switching from streets to the new road.
Managerial Economics, Lecture 23: B/C Examples Impacts of the Project, 1 Costs Construction costs (including land) Maintenance costs Costs of hiring toll booth operators Lost views or other lost amenities not reflected in price of land
Managerial Economics, Lecture 23: B/C Examples Impacts of the Project, 2 Key Benefits Time savings to commuters Time savings to drivers on existing streets Drop in accidents (perhaps offset by a higher fatality rate for the small number of accidents on the highway )
Managerial Economics, Lecture 23: B/C Examples Impacts of the Project, 3 Transfers Increased house values, especially around the entrances to the new highway. Increased property taxes on houses, especially around the entrances to the new highway. Tolls collected on the new highway.
Managerial Economics, Lecture 23: B/C Examples Impacts of the Project, 4 More Transfers Lost retail sales on the highways that used to serve the commuters. Decreased values of stores on these highways. Decreased property taxes from commercial property on these highways.